Correlation Between Valneva SE and Apartment Investment

Can any of the company-specific risk be diversified away by investing in both Valneva SE and Apartment Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Valneva SE and Apartment Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Valneva SE ADR and Apartment Investment and, you can compare the effects of market volatilities on Valneva SE and Apartment Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Valneva SE with a short position of Apartment Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valneva SE and Apartment Investment.

Diversification Opportunities for Valneva SE and Apartment Investment

0.61

Correlation Coefficient

Valneva SE  Apartment Investment

Poor diversification

The 3 months correlation between Valneva and Apartment is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Valneva SE ADR and Apartment Investment and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apartment Investment and and Valneva SE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Valneva SE ADR are associated (or correlated) with Apartment Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apartment Investment and has no effect on the direction of Valneva SE i.e., Valneva SE and Apartment Investment go up and down completely randomly.

Pair Corralation between Valneva SE and Apartment Investment

Given the investment horizon of 90 days Valneva SE ADR is expected to generate 3.05 times more return on investment than Apartment Investment. However, Valneva SE is 3.05 times more volatile than Apartment Investment and. It trades about 0.21 of its potential returns per unit of risk. Apartment Investment and is currently generating about 0.14 per unit of risk. If you would invest  404.00  in Valneva SE ADR on December 21, 2024 and sell it today you would earn a total of  321.00  from holding Valneva SE ADR or generate 79.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Valneva SE ADR  vs.  Apartment Investment and

Valneva SE ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Valneva SE ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Valneva SE displayed solid returns over the last few months and may actually be approaching a breakup point.

Apartment Investment and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apartment Investment and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Apartment Investment showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Valneva SE and Apartment Investment

The main advantage of trading using opposite Valneva SE and Apartment Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valneva SE position performs unexpectedly, Apartment Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Apartment Investment will offset losses from the drop in Apartment Investment's long position.

The idea behind Valneva SE ADR and Apartment Investment and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.